Employees rate electric vehicle salary sacrifice most valuable benefit

Employees have rated a salary sacrifice scheme that offers electric cars as the most valuable flexible benefit, new research suggests.

Almost half (40%) of the 5,000 employees surveyed by Fleet Evolution said that salary sacrifice was the most important benefit. This was followed by pensions (37%) and flexible working (9%).

Furthermore, more than half (55%) of employees said that they would not have opted for an electric car had it not been provided through a salary sacrifice car scheme, while factors that informed their decision to switch to an electric vehicle (EV) included the provision of workplace charging and the high costs of fossil fuel.

However, when asked what was the single most important factor that prompted them to switch to an EV, more than three-quarters (78%) of respondents said that it was the cost savings that could be enjoyed by making the switch.

A major factor was the low benefit-in-kind (BIK) tax rates on EVs, compared to much higher rates, typically in the 20-30% region, for fossil fueled cars.

There was overwhelming support for employers who offered a salary sacrifice car scheme, with 62% of those surveyed saying that they would not move to an employer that did not offer salary sacrifice cars as an employee benefit.

Andrew Leech, founder and managing director of Fleet Evolution, said: “At a time when many employees face rising costs across the board in almost all areas of life, what this major new survey underlines is the importance of having flexible benefits, such as a salary sacrifice car scheme, as cost-saving initiatives available to employees.

“The current BIK tax regime makes electric cars affordable for many employees who are above the minimum living wage, especially when compared to the high tax rates and high fuel costs for both petrol and diesel models currently.

“Electric cars are also an extremely valuable benefit to employees due to their convenience, ease of use, absence of upfront payments and value for money.”

Leach added: “A key benefit from an employer perspective is the impact on the company’s ESG (Environment, Social and Governance) policy, as EV salary sacrifice schemes are very carbon efficient because they promote low carbon vehicles across the board at a time when many companies are looking to cut their carbon footprint.”

For more from Fleet News on salary sacrifice and five steps to make your scheme a success, click here.